Justia Insurance Law Opinion Summaries

William Loomis was injured in a two-vehicle accident while driving a truck for his employer, XPO Logistics, Inc. The truck was registered in Indiana and garaged in New York. After recovering the full amount from the other vehicle’s liability insurer, Loomis sought additional recovery from ACE American Insurance Company, XPO’s insurer. ACE denied the claim, stating that the policy did not include underinsured motorist (UIM) coverage in Indiana or New York.Loomis sued ACE in New York state court, alleging breach of the insurance agreement. The case was removed to the United States District Court for the Northern District of New York. The district court granted Loomis’s motion, applying Indiana law, and concluded that the policy was not exempt from Indiana’s UIM statute. However, the court later granted ACE’s motion for summary judgment, determining that ACE’s obligation to provide UIM coverage was subject to the exhaustion of a $3 million retained limit. Both parties appealed, and the United States Court of Appeals for the Second Circuit certified two questions to the Indiana Supreme Court.The Indiana Supreme Court reviewed the case and concluded that the term “commercial excess liability policy” under Indiana law is ambiguous and must be construed in favor of the insured. Therefore, the policy in question is not exempt from the UIM coverage requirements. Additionally, the court found that the phrase “limits of liability” is also ambiguous and must be construed in favor of the insured, meaning that ACE’s statutory obligation to provide UIM coverage is not subject to the $3 million retained limit. The court answered both certified questions in the negative, ruling in favor of Loomis. View "Loomis v. ACE American Insurance Co." on Justia Law

Lisa Davis and her son, Brandon Zoladkiewicz, were involved in a car accident with an uninsured drunk driver, resulting in Davis's death and Brandon's serious injuries. Davis and her husband, Mark Ginsberg, had separate but nearly identical insurance policies from the same carrier, each with uninsured motorist coverage of $100,000 per person and $300,000 per accident. Ginsberg, individually and as executor of Davis's estate, and Ron Zoladkiewicz, as guardian ad litem for Brandon, sought coverage from both policies. The insurance carrier agreed to pay the coverage limit for one policy but refused to combine or stack the two policies.The Superior Court of Delaware dismissed the plaintiffs' complaint, agreeing with the insurance carrier that the Delaware Insurance Code limited coverage to one policy when the policies were issued by the same insurer to insureds in the same household. The court found that the statute allowed anti-stacking provisions and that the policies' provisions were not ambiguous enough to permit stacking.The Supreme Court of Delaware reversed the Superior Court's decision. The court held that the Delaware Insurance Code does not prohibit stacking of underinsured/uninsured motorist coverage policies issued by the same carrier to insureds in the same household. Instead, the Code requires that the court limit coverage to the highest limit of liability set by either insurance policy. The court found that the policies were ambiguous because they contained conflicting provisions regarding stacking. Interpreting the ambiguity in favor of the insureds, the court allowed stacking of the policies. Additionally, the court determined that the releases signed by Ginsberg and Brandon Zoladkiewicz did not preclude recovery under the Ginsberg Policy. The case was remanded to the Superior Court to determine the amount recoverable under the Ginsberg Policy. View "Ginsberg v. Harleysville Worcester Insurance Company" on Justia Law

The case involves the Police Jury of Calcasieu Parish, a political subdivision of Louisiana, which suffered property damage from Hurricanes Laura and Delta in 2020. The Police Jury had insurance policies with a syndicate of eight domestic insurers. The insurers sought to compel arbitration in New York under New York law for the approximately 300 property damage claims. The Police Jury alleged underpayment and untimely payments by the insurers and filed suit in state court, which was later removed to the United States District Court for the Western District of Louisiana.The Western District Court granted the Police Jury's motion to certify three questions of Louisiana law to the Louisiana Supreme Court. The questions concerned the validity of arbitration clauses in insurance policies issued to Louisiana political subdivisions, particularly in light of a 2020 amendment to La. R.S. 22:868 and the applicability of La. R.S. 9:2778, which bars arbitration clauses in contracts with the state or its political subdivisions.The Louisiana Supreme Court addressed the certified questions. First, it held that the 2020 amendment to La. R.S. 22:868, which allowed forum or venue selection clauses in certain insurance contracts, did not implicitly repeal the prohibition of arbitration clauses in all insurance contracts under La. R.S. 22:868(A). Second, the court determined that La. R.S. 9:2778 applies to all contracts with political subdivisions, including insurance contracts, thereby prohibiting arbitration outside Louisiana or the application of foreign law. Third, the court held that a domestic insurer cannot use equitable estoppel to enforce an arbitration clause in another insurer’s policy against a political subdivision, as it would contravene the positive law prohibiting arbitration clauses in La. R.S. 22:868(A)(2).The Louisiana Supreme Court answered all three certified questions, maintaining the prohibition of arbitration clauses in insurance policies issued to Louisiana political subdivisions and affirming the applicability of La. R.S. 9:2778 to such contracts. View "POLICE JURY OF CALCASIEU PARISH VS. INDIAN HARBOR INSURANCE CO." on Justia Law

In 2019, Huberto Martinez's vehicle slid off an icy highway in Shreveport, Louisiana, and was subsequently struck by a tractor-trailer driven by Salah Dahir and owned by Starr Carriers, LLC. Martinez and his passengers, Ada Licona, Rosa Rivera, and Salvador Flores, filed lawsuits against Dahir, Starr Carriers, and their insurer, American Transportation Group Risk Retention Group, Inc. (ATG), which had a policy limit of $1,000,000. Martinez settled his claims before trial, but the jury awarded substantial damages to the remaining plaintiffs, exceeding ATG's policy limit.The First Judicial District Court, Parish of Caddo, denied the defendants' post-trial motions and rendered a final judgment in favor of the plaintiffs for $2,802,054.66 plus interest and costs. The defendants sought a suspensive appeal and requested a bond less than the entire judgment, citing their inability to secure such a bond. The trial court set the bond at the full judgment amount. ATG posted a bond for its remaining policy limits plus interest and costs. The Second Circuit Court of Appeal denied ATG's request for supervisory review.The Supreme Court of Louisiana reviewed the case and held that an insurer is not required to post a bond exceeding its policy limits to secure a suspensive appeal. The court determined that requiring ATG to post a bond for the entire judgment would impair the contractual limits of liability and violate the contract clause of the state constitution. The court allowed ATG to post a bond up to its policy limits for a suspensive appeal and to devolutively appeal the remainder of the judgment. The case was remanded for further proceedings consistent with this holding. View "MARTINEZ VS. AMERICAN TRANSPORT GROUP RISK RETENTION GROUP, INC." on Justia Law

The plaintiffs, Shane and Maura Pelissier, insured their automobile through GEICO General Insurance Company. They sought underinsured motorist benefits four and a half years after a motor vehicle accident with an underinsured driver. GEICO moved for summary judgment, citing a policy provision requiring lawsuits for underinsured motorist benefits to be filed within three years of the accident. The trial court denied the motion and transferred three interlocutory appeal questions to the Supreme Court of New Hampshire.The trial court found that the contractual limitations provision was unenforceable because it could require insureds to file suit before a justiciable cause of action exists. It also found that using the date of the accident as the triggering event for the limitations period was contrary to public policy and that there was a material factual dispute regarding the plaintiffs' ability to discover the tortfeasor’s policy limits before the limitations period expired. The trial court denied GEICO’s motion for reconsideration but granted an interlocutory appeal.The Supreme Court of New Hampshire reviewed whether the contractual limitations provision violated public policy. The court held that the provision was unenforceable because it could force insureds to file suit before their cause of action for underinsured motorist benefits had accrued, thus restricting their ability to recover damages. The court noted that the provision contravened the public policy underlying New Hampshire’s uninsured motorist statute, RSA 264:15, which aims to place insured persons in the same position as if the offending motorist had adequate liability insurance. The court affirmed the trial court’s decision in part, did not address the second interlocutory question, and remanded the case for further proceedings. View "Pelissier v. GEICO Gen. Ins. Co" on Justia Law

State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Insurance Company (collectively, “State Farm”) provide automobile insurance in New York and are required to reimburse individuals injured in automobile accidents for necessary health expenses under New York’s No-Fault Act. State Farm alleges that several health care providers and related entities engaged in a scheme to fraudulently obtain No-Fault benefits by providing unnecessary treatments and services, and then pursued baseless arbitrations and state-court proceedings to seek reimbursement for unpaid bills.The United States District Court for the Eastern District of New York granted State Farm’s motion for a preliminary injunction in part, enjoining the defendants from proceeding with pending arbitrations and from initiating new arbitrations and state-court proceedings, but denied an injunction of the pending state-court proceedings. The district court found that State Farm demonstrated irreparable harm due to the fragmented nature of the proceedings, which obscured the alleged fraud, and the risk of inconsistent judgments and preclusive effects.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s decision to grant the preliminary injunction in part. The appellate court held that the district court did not abuse its discretion in finding that State Farm demonstrated irreparable harm, serious questions going to the merits, a balance of hardships tipping in its favor, and that the injunction was in the public interest. The court also concluded that the Federal Arbitration Act did not bar the injunction of the arbitrations because the arbitrations would prevent State Farm from effectively vindicating its RICO claims.Additionally, the appellate court reversed the district court’s decision not to enjoin the pending state-court proceedings, finding that the Anti-Injunction Act’s “expressly-authorized” exception applied. The court determined that the state-court proceedings were part of a pattern of baseless, repetitive claims that furthered the alleged RICO violation, and that enjoining these proceedings was necessary to give RICO its intended scope. The case was remanded for further proceedings consistent with this opinion. View "State Farm Mutual v. Tri-Borough" on Justia Law

This case involves a dispute between two insurance companies, Gemini and Zurich, over their respective contributions to a $2 million settlement arising from a fatal accident involving a tractor-trailer. FSR Trucking, the employer of the driver involved in the accident, was insured by Zurich for $1 million and by Gemini for $3 million. The settlement was paid with $2 million from Gemini and $1 million from Ryder’s insurer. The disagreement centers on how much each insurer should contribute to the $2 million paid by Gemini.The United States District Court for the Middle District of Florida granted summary judgment in favor of Zurich, ruling that both insurance policies were "mutually repugnant" and thus required pro rata contribution. Zurich had already tendered $500,000, which the court deemed its pro rata share. The court also awarded Gemini prejudgment interest on the $500,000 from the date of the settlement payment to the date Zurich tendered its share. Gemini appealed, seeking an additional $500,000, while Zurich cross-appealed the award of prejudgment interest.The United States Court of Appeals for the Eleventh Circuit reviewed the case de novo and reversed the district court's decision regarding the amount of contribution. The appellate court held that Gemini's policy was excess to Zurich's, based on the specific language in the "other insurance" clauses of both policies. Consequently, Zurich was required to pay an additional $500,000 to Gemini. The court affirmed the district court's award of prejudgment interest on the initial $500,000 and directed the lower court to award prejudgment interest on the additional $500,000 from the date of the settlement payment to the date of the amended final judgment. The case was remanded for entry of judgment consistent with these findings. View "Gemini Insurance Co. v. Zurich American Insurance Co." on Justia Law

In 2020, First United Pentecostal Church in DeQuincy, Louisiana, sustained significant damage from Hurricanes Laura and Delta. The church was insured by Church Mutual Insurance Company (CM), which covered several buildings on the property. After the hurricanes, First United submitted a claim to CM, but CM delayed the inspection and payment process. CM eventually made two payments totaling $191,832.28, which the church used for repairs. Dissatisfied with the amount and timing of the payments, First United filed a lawsuit against CM, alleging breach of contract and violations of Louisiana insurance statutes.The United States District Court for the Western District of Louisiana held a bench trial and found in favor of First United. The court concluded that CM had acted in bad faith by failing to make timely payments and awarded First United $1,101,122.87 in unpaid losses, along with statutory penalties, attorney fees, and costs, bringing the total award to $2,073,838.96. The court later amended the judgment to $2,052,335.09 after correcting some errors. CM's motions for a new trial and for judgment as a matter of law were denied, leading to this appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decisions on several points, including the denial of CM's motion to exclude First United's expert, Kermith Sonnier, and the use of Sonnier's estimate to calculate damages. However, the appellate court reversed the district court's imposition of statutory penalties, attorney fees, and costs, finding that CM's actions were not arbitrary, capricious, or without probable cause. The case was remanded for further proceedings consistent with the appellate court's opinion. View "First United v. Church Mutual Insurance" on Justia Law

Nicholas and Stacy Boerson, owners of New Heights Farm I and II in Michigan, faced a disappointing corn and soybean harvest in 2019. They submitted crop insurance claims to Great American Insurance Company, which were delayed due to an ongoing federal fraud investigation. The Boersons sued Great American, the Federal Crop Insurance Corporation, and the U.S. Department of Agriculture for breach of contract, bad faith adjustment, and violations of insurance laws.The United States District Court for the Western District of Michigan dismissed the Boersons' claims. It ruled that claims related to Great American's nonpayment were unripe due to the ongoing investigation, while claims alleging false measurements and statements by Great American were ripe but subject to arbitration. The court also dismissed claims against the federal defendants on sovereign immunity grounds.The United States Court of Appeals for the Sixth Circuit affirmed the district court's dismissal. It held that the claims related to nonpayment were unripe because the insurance policy barred payment until the investigation concluded. The court also found that the arbitration agreement in the insurance policy covered the ripe claims against Great American, requiring those disputes to be resolved through arbitration. Additionally, the court ruled that sovereign immunity barred the claims against the federal defendants, as there was no clear waiver of immunity for constructive denial claims under the Federal Crop Insurance Act. View "New Heights Farm I, LLC v. Great American Insurance Co." on Justia Law

Following an accident, Jeremy Marchek sued his auto insurer, United Services Automobile Association (USAA), claiming that the company breached the terms of the policy it issued to him. Marchek argued that USAA wrongfully failed to compensate him for sales taxes and mandatory fees necessary to purchase a replacement vehicle after USAA declared his vehicle to be beyond repair. USAA paid Marchek the pre-accident value of his vehicle minus a deductible but did not include taxes and fees in the payment.The United States District Court for the Western District of Michigan dismissed Marchek’s complaint, ruling that USAA was not contractually obligated to compensate him for taxes and fees. The district court found that the insurance policy did not require USAA to cover these additional costs when calculating the actual cash value (ACV) of the vehicle.The United States Court of Appeals for the Sixth Circuit reviewed the case and reversed the district court’s decision. The appellate court held that the plain language of the insurance policy plausibly requires USAA to compensate Marchek for the sales taxes and mandatory fees necessary to purchase a replacement vehicle. The court found that the policy’s definition of ACV, which is “the amount that it would cost, at the time of loss, to buy a comparable vehicle,” does not unambiguously exclude taxes and fees. Therefore, the case was remanded for further proceedings to determine whether USAA breached the contract by not including these costs in its payment to Marchek. View "Marchek v. United Services Automobile Association" on Justia Law